Jammu & Kashmir Bank Ltd. · NSE:J&KBANK
Jammu & Kashmir Bank — db Access India Conference 2013
68 slides from Jammu & Kashmir Bank's conference presentation, Mar 4, 2013
Slide 1: db Access India Conference 2013
Celebrating 75 years of Service db Access India Conference 2013 March 04, 2013 – Mumbai
Slide 2: Slide 2
Slide 3: An Overview
An Overview
Slide 4: Basic Facts
Basic Facts ▪ Incorporated in 1938 ▪ Listed on the NSE and BSE ▪ Rated P1+ by S&P: highest degree of safety ▪ Four decades of uninterrupted profitability and dividends ▪ Adjudged Best Bank in the Old Private Sector Banks category by Financial Express for FY ended March 2011 ▪ Adjudged “Best Bank” in
Slide 5: One of a Kind
One of a Kind ▪ Private sector bank, despite government’s majority holding ▪ Only private sector bank designated as RBI’s agent for banking business ▪ Conducts banking business of the Central Government: — Direct Tax collection — Indirect Tax collection — Utility payment collection 3 Notes
Slide 6: Facets and Roles
Facets and Roles ▪ Commercial Bank ▪ Development Financing Institution ▪ Financial Services Provider 4 Notes
Slide 7: Regional Goliath
Regional Goliath ▪ Dominates a region — 555 branches in the state — 509 ATMs ▪ Controls a geography — Branches in every block of J&K ▪ Serving a community — 86 lakh Adult population — 47 lakh Account holders of J&K Bank ▪ Business leadership in J&K 5 Notes
Slide 8: Shareholding Pattern (%)
Shareholding Pattern (%) (22.02.2013) Government of J&K Foreign Inst. Investors 4.64 0.48 5.89 Resident Individuals 11.41 Bodies Corporates/ Insurance Cos/Clearing Mem./Banks Indian Mutual Funds 24.41 Non-Resident Indians 53.17 6 Notes
Slide 9: Best of both Worlds
Best of both Worlds ▪ Private Bank in terms of earnings, and ▪ PSU Bank in terms of cost structure ▪ Public ownership − Stability − Safety ▪ Private functioning − Efficiency − Growth 7 Notes
Slide 10: Subsidiaries and Investments
Subsidiaries and Investments ▪ J&K Bank Financial Services Ltd — Providing Depository Services — Offering Stock Broking Services ▪ Insurance JV with MetLife International ▪ Distributor of — Life Insurance products; partner: MetLife — General Insurance; partner: Bajaj Allianz ▪ Shareholder in J&K Gra
Slide 11: Consistent Growth & Stability
Consistent Growth & Stability
Slide 12: Decade of Development - I
Decade of Development - I (in Rupees Crore) Year Year Year Year Year Particulars ended ended ended ended ended Mar, 03 Mar, 04 Mar, 05 Mar, 06 Mar, 07 Net Worth 1242.00 1593.74 1665.40 1799.47 2008.73 Deposits 14674.9 18661.4 21645.0 23484.6 25194.3 Advances 8011.0 9284.9 11517.1 14483.1 17079.9 Inv
Slide 13: Decade of Development - I
Decade of Development - I (in Rupees Crore) Year Year Year Year Year Particulars ended ended ended ended ended Mar, 08 Mar, 09 Mar, 10 Mar, 11 Mar, 12 Net Worth 2280.82 2622.86 3010.46 3478.68 4093.18 Deposits 28593.3 33004.1 37237.2 44675.9 53346.9 Advances 18882.6 20930.4 23057.2 26193.6 33077.4 I
Slide 14: Decade of Development - II
Decade of Development - II (%) Year Year Year Year Year Ratios ended ended ended ended ended Mar, 03 Mar, 04 Mar, 05 Mar, 06 Mar, 07 Net Interest Margins 3.67 3.58 2.90 2.83 2.98 Interest Spread 3.34 3.26 2.61 2.61 2.79 Yield on Advances 10.53 9.50 8.42 8.48 8.58 Yield on Investments 10.01 8.75 7.38
Slide 15: Decade of Development - II
Decade of Development - II (%) Year Year Year Year Year Ratios ended ended ended ended ended Mar, 08 Mar, 09 Mar, 10 Mar, 11 Mar, 12 Net Interest Margins 2.94 3.10 3.04 3.69 3.84 Interest Spread 2.64 2.84 2.79 3.46 3.57 Yield on Advances 10.44 11.53 10.65 10.86 12.12 Yield on Investments 6.70 6.79 5
Slide 16: Decade of Development - III
Decade of Development - III Year Year Year Year Year Ratios ended ended ended ended ended Mar, 03 Mar, 04 Mar, 05 Mar, 06 Mar, 07 Cost to Income Ratio (%) 31.94 31.81 47.59 43.32 40.13 CD Ratio (%) 54.59 49.75 53.21 61.67 67.79 CASA Ratio (%) 33.39 30.26 32.00 34.17 37.02 Business per Employee (in R
Slide 17: Decade of Development - III
Decade of Development - III Year Year Year Year Year Ratios ended ended ended ended ended Mar, 08 Mar, 09 Mar, 10 Mar, 11 Mar, 12 Cost to Income Ratio (%) 38.24 37.81 37.60 39.77 36.92 CD Ratio (%) 66.04 63.42 61.92 58.63 62.00 CASA Ratio (%) 39.16 38.11 40.69 40.48 40.71 Business per Employee (in R
Slide 18: Decade of Development - IV
Decade of Development - IV (%) Year Year Year Year Year Ratios ended ended ended ended ended Mar, 03 Mar, 04 Mar, 05 Mar, 06 Mar, 07 Operating Expenses to AWF 1.65 1.54 1.41 1.36 1.35 Operating Expenses to Total Income 15.16 16.08 19.62 19.00 18.08 Operating expenses to Other Income 90.49 97.17 336.
Slide 19: Decade of Development - IV
Decade of Development - IV (%) Year Year Year Year Year Ratios ended ended ended ended ended Mar, 08 Mar, 09 Mar, 10 Mar, 11 Mar, 12 Operating Expenses to AWF 1.31 1.34 1.44 1.70 1.56 Operating Expenses to Total Income 15.06 14.56 16.62 18.61 15.52 Operating expenses to Other Income 164.73 192.15 13
Slide 20: Decade of Development - V
Decade of Development - V Year Year Year Year Year Ratios ended ended ended ended ended Mar, 03 Mar, 04 Mar, 05 Mar, 06 Mar, 07 Earning per Share (in Rupees) 69.64 83.78 23.74 36.48 56.62 Net Asset Value / Book Value (in Rupees) 256.08 328.61 343.54 371.20 414.36 Adjusted Book Value (in Rupees) 229.
Slide 21: Decade of Development - V
Decade of Development - V Year Year Year Year Year Ratios ended ended ended ended ended Mar, 08 Mar, 09 Mar, 10 Mar, 11 Mar, 12 Earning per Share (in Rupees) 74.26 84.54 105.69 126.90 165.69 Net Asset Value / Book Value (in Rupees) 476.28 541.04 621.00 717.58 844.34 Adjusted Book Value (in Rupees) 4
Slide 22: Slide 22
Slide 23: Financial Results 9M Dec, 2012
Financial Results 9 M Dec, 2012
Slide 24: Financial Results – Dec, 2012
Financial Results – Dec, 2012 (in Rupees Crore) Financial Results Analysis (Quarter to Quarter and Nine Months ended Dec, 2012) % Change Q3 Q3 Q1 Q2 Q3 Particulars % Change Q3 over 2012-13 2011-12 2012-13 2012-13 2012-13 Q2 Interest Earned 1533.24 1266.53 21.06% 1476.16 1500.59 1533.24 2.18% Interes
Slide 25: Financial Results – Dec, 2012
Financial Results – Dec, 2012 (in Rupees Crore) Financial Results Analysis (Quarter to Quarter and Nine Months ended Dec, 2012) 9 M Dec, 9 M Dec, Year end Particulars % Change 2012 2011 Mar, 12 Interest Earned 4510.00 3478.04 29.67% 4835.58 Interest Expended 2827.51 2155.78 31.16% 2997.22 Net Intere
Slide 26: Ratio Analysis – I
Ratio Analysis – I (%) Quarter Quarter Quarter Quarter Year 9 M Dec, 9 M Dec, Profitability Ratios ended ended ended ended ended 2012 2011 Dec, 12 Dec, 11 Jun, 12 Sep, 12 Mar, 12 Net Interest Margins 1.02 0.90 0.96 0.99 2.94 2.83 Annualized 4.07 3.60 3.84 3.94 3.93 3.77 3.84 Interest Spread 0.96 0.8
Slide 27: Ratio Analysis – II
Ratio Analysis – II (%) Quarter Quarter Quarter Quarter Year 9 M Dec, 9 M Dec, Profitability Ratios ended ended ended ended ended 2012 2011 Dec, 12 Dec, 11 Jun, 12 Sep, 12 Mar, 12 Return on Assets 0.45 0.38 0.42 0.45 1.26 1.08 Annualized 1.87 1.52 1.68 1.79 1.78 1.44 1.56 Return on period end Net Wo
Slide 28: Ratio Analysis – III
Ratio Analysis – III Quarter Quarter Quarter Quarter Year 9 M Dec, 9 M Dec, Efficiency Ratios ended ended ended ended ended 2012 2011 Dec, 12 Dec, 11 Jun, 12 Sep, 12 Mar, 12 Cost to Income Ratio (%) 36.50 38.30 34.00 34.32 34.98 37.90 36.92 CD Ratio (%) 62.48 60.98 62.55 62.40 62.48 60.98 62.00 CASA
Slide 29: Ratio Analysis – IV
Ratio Analysis – IV (%) Quarter Quarter Quarter Quarter Year 9 M Dec, 9 M Dec, Operating Ratios ended ended ended ended ended 2012 2011 Dec, 12 Dec, 11 Jun, 12 Sep, 12 Mar, 12 Operating Expenses to AWF (Ann.) 1.61 1.51 1.46 1.46 1.51 1.55 1.56 Operating Expenses to Total Income 15.39 14.99 13.62 13.
Slide 30: Ratio Analysis – V
Ratio Analysis – V Quarter Quarter Quarter Quarter Year 9 M Dec, 9 M Dec, Valuation Ratios ended ended ended ended ended 2012 2011 Dec, 12 Dec, 11 Jun, 12 Sep, 12 Mar, 12 Earnings per Share (in Rs) 59.70 43.97 50.76 55.60 166.06 122.76 Annualized 238.80 175.89 203.05 222.41 221.42 163.68 165.69 Net
Slide 31: Geographical Break-up
Geographical Break-up (in Rupees Crore) As on Dec 31, 2012 From J&K State From Rest of India S. Particulars No. Amount % age Amount % age 1 Deposits 37246 65 % 19828 35 % 2 CASA Ratio - 55 - 10 3 Gross Advances 14932 41 % 21258 59 % 4 Gross Profit 899.72 71 % 372.89 29 % 5 Net Interest Margin - 6.14
Slide 32: Deposits – Compositional Break-up
Bank as Whole (%) 9% Deposits – Current Compositional Saving 60% 31% Break-up Term (Dec 12) In Rest of India (%) 6% 4% Current Saving Term 90% Within J&K (%) 45% 10% Current Saving Term 45% 30 Notes
Slide 33: Advances – Sector-wise (Dec 12)
Bank as Whole (%) 1% 10% Agriculture 10% Trade Advances – Personal 55% 16% SME Sector-wise Corporate (Dec 12) Others 8% In Rest of India (%) Agriculture 1% 6% 5% 4% Trade 3% Personal SME Corporate 81% Others Within J&K (%) Agriculture 1% Trade 19% 16% Personal SME 15% 16% Corporate Others 33% 31 Not
Slide 34: Restructuring (Dec 12) - I
Restructuring (Dec 12) - I (in Rupees Crore) For For Financial For 9 M S. Quarter Year Particulars ended No. ended ended Dec, 2012 Dec, 2012 March 31, ‘12 1 Balance at the start of the period 1501.29 1365.75 1545.10 Additions during the period 728.32 991.02 570.40 Repayments during the period 251.92
Slide 35: Restructuring (Dec 12) – II
Restructuring (Dec 12) – II Outstanding Restructured portfolio well distributed among 10 sectors and 2422 accounts Total Outstanding NPA’s from Outstanding Restructured Portfolio Rs 89.90 crore (4.5 %), for which provision of Rs 79.02 crore available Classification of Outstanding Restructured Po
Slide 36: Investments, (Dec 12) – I
Investments, (Dec 12) – I (in Rs crore) 7429 19 15233 Held to Maturity 67 % Held for Trading 0.1 % Available for Sale 33 % Duration 6.45 3.59 3.78 2.55 10 5 0 HTM HFT AFS Total 34 Notes
Slide 37: Investments, (Dec 12) – II
Investments, (Dec 12) – II (in Rs. crore) 9626 13055 SLR Securities 58 % Non-SLR Securities 42 % Yield (on daily average balances for 9 M ended Dec 2012) 8.30 7.82 7.43 10 5 0 SLR Securities Non-SLR Total Portfolio Securities 35 Notes
Slide 38: Slide 38
Slide 39: Industry Review
Industry = Review USK Bank
Slide 40: Return on Assets (%)
Return on Assets (%) For 9 M ended Dec, 2012 2.0 1.87 1.78 1.61 1.66 1.5 1.23 1.14 1.03 0.91 0.95 1.0 0.77 0.78 0.68 0.41 0.5 0.0 38 Notes
Slide 41: Return on Equity (%)
Return on Equity (%) For 9 M ended Dec, 2012 23.88 25 19.82 20 18.37 15.61 15.81 16.08 16.32 13.96 14.04 15 12.5 12.80 13.27 10 5 0 39 Notes
Slide 42: Cost to Income (%)
Cost to Income (%) For 9 M ended Dec, 2012 60 56.80 55 50 46.68 47.17 47.88 45.03 46.16 45 42.96 43.67 39.91 40.19 40.70 41.17 40 34.98 35 30 40 Notes
Slide 43: CASA Ratio (%)
CASA Ratio (%) As on Dec, 2012 50 45.4 39.43 40 40.9 42.45 40 36.92 30.38 31.25 31.66 28.10 28.33 30 25.05 20.46 20 10 0 41 Notes
Slide 44: Net Impaired Loans (%)
Net Impaired Loans (%) As on Dec, 2012 3 2.56 2.59 2.35 2.5 2.06 2.17 2 1.63 1.70 1.5 1 0.76 0.33 0.5 0.14 0.2 0.05 0 42 Notes
Slide 45: Coverage Ratio (%): Among Highest in India
Coverage Ratio (%): Among Highest in India As on Dec, 2012 97.20 100 94.21 90 80 81 77.7 80 66.21 70 60.97 61.23 61.49 55.97 58.02 60 48.88 50 40 30 20 43 Notes
Slide 46: Tier I Capital (%) (Basel II)
Tier I Capital (%) (Basel II) As on Dec, 2012 15 13.25 11.80 10.75 10.9 9.56 9.76 8.75 8.83 10 8.08 8.62 8.66 7.40 8.03 5 0 44 Notes
Slide 47: Earnings per Share (Rs.)
Earnings per Share (Rs.) For 9 M ended Dec, 2012 161.0 166.1 120 106.6 100 85.0 80 72.9 60 48.5 52.2 40 29.2 29.3 20.5 21.2 24.9 20 8.6 0 45 Notes
Slide 48: Book Value (Rs.)
Book Value (Rs.) As on Dec, 2012 1,215 1200 1,010 884 900 632 633 582 600 485 245 262 287 300 170 215 104 0 46 Notes
Slide 49: Price to Book Value
Price to Book Value As on Dec, 2012 5.0 3.99 4.0 3.0 2.14 1.84 1.96 1.96 2.0 1.36 1.02 1.05 0.73 0.75 0.79 0.81 0.99 1.0 0.0 47 Notes
Slide 50: PE Ratio
PE Ratio As on Dec, 2012 24.83 25 20 16.34 13.55 15 11.11 11.97 10 6.91 7.69 8.28 4.75 5.12 6.02 6.13 6.19 5 0 48 Notes
Slide 51: Dividend Yield (%)
Dividend Yield (%) For FY ended Mar, 2012 4.83 5 3.79 3.95 4 3.39 3.07 3.22 3 2.31 2.38 2 1.67 1.85 1.40 1.13 0.83 1 0 49 Notes
Slide 52: Slide 52
Slide 53: J&K State – Potential for Growth
J&K State – Potential for Growth
Slide 54: J&K State’s Economy – Basic Indicators
J&K State’s Economy – Basic Indicators All India / S. No. Particulars J&K State National Average 1 Total Population (in crores) 1.25 121.02 2 Area (in Sq Kms) 222236 3287240 3 Density (persons / Sq Km) 124 382 4 Per capita Income (in Rupees) 28932 38005 5 Population BPL (%) 21.63 % 27.5 % 6 Literacy
Slide 55: J&K State Economy – GDP Size and Growth
J&K State Economy – GDP Size and Growth Amount in Rs.crore Particulars 2009-10 2010-11 2011-12 Size of GDP 36329 38739 41367 Contribution by Primary Sector 7796 (22%) 7976 (21%) 8207 (20%) Contribution by Secondary Sector 9871 (27%) 10289 (26%) 10727 (26%) Contribution by Tertiary Sector 18662 (51%)
Slide 56: J&K State Economy – Economic Reconstruction and its Impact
J&K State Economy – Economic Reconstruction and its Impact ▪ GDP / economy in J&K State accelerating and is poised for further growth in future. Government spending and Private Investment on the rise ▪ Record tourist inflow during last two years, more expected this year. Increased investment in tour
Slide 57: J&K State – Credit Gap
J&K State – Credit Gap ▪ J&K accounts for 0.6% of India’s GDP, and yet absorbs only 0.30% of total national credit ▪ J&K accounts for 1% of India’s population and yet accounts for only 0.2% of India’s personal credit ▪ Credit in J&K needs to increase five-fold and Personal Credit in J&K has to tripl
Slide 58: J&K State – Potential for Horticultural Lending - I
J&K State – Potential for Horticultural Lending - I ▪ Agriculture involves about 70 % of the population and contributes 23 % to the GDP, yet only 13 % of J&K Bank’s lending is to this sector. Horticultural production contributes about 45 % to Agricultural production and involves 30 lac people ▪ Appl
Slide 59: J&K State – Potential for Horticultural Lending - II
J&K State – Potential for Horticultural Lending - II ▪ Out of a total of 283000 apple growers in the State, Bank’s finance has been extended to about 7200 growers. Tapping the remaining growers will generate credit of about Rs.10500 crore more ▪ At an advance of Rs.3 lac per acre, a total Working Ca
Slide 60: J&K State – Impact of Horticultural Lending on Profitability
J&K State – Impact of Horticultural Lending on Profitability ▪ Current shortfall in Agriculture Sector Lending is Rs. 2760 crore, which has to be invested in RIDF/MSME Bonds/RHF @ 3 to 5 % for 3-7 years ▪ Interest Subvention Scheme extended to J&K Bank recently providing a level playing field vis-à-
Slide 61: Road Ahead
Road Ahead
Slide 62: J&K Bank - Ground work done for growth
J&K Bank - Ground work done for growth ▪ Capital Adequacy at 13.82%, Tier I 11.80% & Tier II 2.02% — No constraints for raising additional Tier I capital. Headroom of about Rs. 4000 crore more available to raise Tier II capital ▪ Made liabilities the driver ▪ Insulated earnings from external volatil
Slide 63: J&K State – Business Strategy
J&K State – Business Strategy ▪ Increasing lending in J&K, which is high margin, low volume ▪ Leveraging our core competence of domain and geographical expertise. ▪ Bridging Credit Gap in J&K with focus on potential and under-serviced sectors 61 Notes
Slide 64: Outside State – Business Strategy
Outside State – Business Strategy Nationally focus on ▪ Rebuilding Corporate Loan Book ▪ Improving WC to TL Ratio ▪ Impetus on SME / Retail sector lending in smaller cities 62 Notes
Slide 65: Road Ahead – March 2013
Road Ahead – March 2013 ▪ To achieve Rs. 1000 crore profit and Rs. 100000 crore business by FY ended March, 2013 Targets ▪ CASA 40% to 45% ▪ NIMs 3.5% to 4%+ ▪ ROA 1.3% to 1.5%+ ▪ ROE 19% to 22% ▪ Advances 25% CAGR ▪ Deposits 20% CAGR ▪ Cost/Income 35-40% ▪ Loan/Deposit 60% to 65% ▪ PCR Above 90% 63
Slide 66: Notes
Notes
Slide 67: Slide 67
Slide 68: www.jkbank.net
www.jkbank.net
Jammu & Kashmir Bank — db Access India Conference 2013 on 6ix